American Water Works: Investing In A Water Utility Giant

By Mark Bern, CPA CFA
We gripe when we fill up our cars and SUVs at the pump, paying over $3 per gallon for refined petroleum. But we think nothing of paying $1.50 for a 16-ounce bottle of water. There are 128 ounces in a gallon, or eight 16-ounce bottles. That means we are more than willing to pay $12 per gallon for water, but we get upset with the oil companies for gouging us and making huge profits. Does this make any sense? Have you ever experienced a drought where you live? I have and it's serious business. The population is growing and there is a finite amount of fresh water in the world and it isn't distributed according to population. "Over 70% of our earth's surface is covered by water ... 97.5% of all water on earth is salt water, leaving only 2.5% as fresh water. Nearly 70%Complete Story »

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Behold, the land of $2 a gallon gas. Gas hasn't been this cheap since 2010 in the U.S. And it was this OnCue Express station in Oklahoma City that led us pas that critical mark on Wednesday, according to GasBuddy.com, a site that tracks gas prices nationwide. Other stations in the region have now followed suit. One station, as of Thursday, is selling a gallon of regular unleaded for $1.98.

Back to Part 4By Mark Bern, CPA CFAThis article will begin with my views, both short and long-term on the industry fundamentals and end with an assessment of some of my favorite companies in the industry. I will follow up with another article to deal with the remaining widely-held companies in the industry, including explanations of why each company did or did not meet my master list criteria.

WASHINGTON — U.S. energy markets marked a seismic shift on Wednesday after federal officials provided clarity on what companies glutted with domestic shale oil can ship to thirsty markets abroad, leading to expectations for a potential surge in petroleum exports.
News that companies can export a type of ultra-light crude if it has been minimally refined pushed U.S. oil prices higher, and triggered a realignment in energy stocks, with refiner shares sagging while those in several oil and gas producers jumped.

By Mark Bern, CPA CFAIn Part I of the original series I discussed the basics about my selection methodology in what constitutes a quality company from my perspective. It would be instructional for readers to review that article and the 10 rules I set out there to get the most out of this and other articles in the series. In Parts II through XXV of the series I provided my overview analysis of the most of the industries I follow and invest in personally.

Submitted by Doug Hornig and Alex Daley of Casey Research, Water is not scarce. It is made up of the first and third most common elements in the universe, and the two readily react to form a highly stable compound that maintains its integrity even at temperature extremes. Hydrologist Dr. Vincent Kotwicki, in his paper Water in the Universe, writes: